FERC cost allocation order is ‘major step backward’ — Wyden

Source: Hannah Northey, E&E reporter • Posted: Friday, June 21, 2013

The chairman of the Senate Energy and Natural Resources Committee sharply criticized members of the Federal Energy Regulatory Commission today for rejecting a proposal that would have made it voluntary for utilities in the Pacific Northwest to pay for regional transmission projects under Order 1000, and vowed to take legislative action if the decision isn’t reversed.

Sen. Ron Wyden (D-Ore.) took issue with the commission’s 3-to-1 vote to approve a filing that ColumbiaGrid, a regional transmission planner, proposed to comply with Order 1000, a far-reaching rule the commission recently approved to revamp the way the grid is planned and paid for.

FERC Commissioners Cheryl LaFleur, John Norris and Philip Moeller voted to approve the filing but said ColumbiaGrid must make it mandatory for its members to participate in cost allocation filings to comply with Order 1000. They also asked the grid operator to submit additional filings within four months. In doing so, the commissioners rejected ColumbiaGrid’s proposal to make it voluntary for its members — Avista Corp., Bonneville Power Administration and Puget Sound Energy — to comply with a program to divvy up the cost of new power lines.

“I strongly urge the commission to promptly reverse this decision,” Wyden said in a statement. “If it does not, I will have little choice but to consider whether a legislative remedy is necessary.”

Wyden said the commission’s decision failed to respect the fact that federally owned entities like the Bonneville Power Administration, a power marketing administration, don’t fall under FERC’s jurisdiction and shouldn’t be forced to “sign a blank check to pay for the costs of transmission that they have not contracted for and may not use.”

BPA owns 75 percent of the high-voltage transmission in the Northwest and markets power from 31 federal dams and one nuclear power plant, serving public and nonpublic utilities in Oregon, Idaho, Washington and western Montana.

Wyden also warned the decision will significantly hamper efforts under Order 1000 to expand transmission planning in the Northwest because the participation of BPA and other public entities is essential for success. “This is directly counter to the interests of Northwest ratepayers,” the senator said.

Clark, a Republican, issued a statement that aligned with Wyden’s sentiment. Clark said that he would have approved ColumbiaGrid’s filing and that FERC’s decision to reject the voluntary status of cost allocation in the Northwest “runs afoul” of the commission’s promise to be flexible and respect regional differences while implementing Order 1000.

FERC “cannot compel [BPA] to participate in the Order No. 1000 regime,” he said.

Clark also noted that entities both jurisdictional and nonjurisdictional to FERC have been planning the grid through ColumbiaGrid since 2006 and have agreed to continue doing so while incorporating elements of Order 1000. Today’s ruling, he said, could jeopardize that collaboration.

“By rejecting key elements of this filing, I am concerned that we may do more harm than good in this region,” Clark said. “I hope that Bonneville will find a way to continue to participate, but by failing to accommodate the region’s unique characteristics, this order may cause the region to fracture, and thereby strand a number of jurisdictional utilities for purposes of Order No. 1000 planning.”